Episode 62 Homes Under the Hammer


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Episode 62

A grand Edwardian home in Eltham in London, a piece of land in Handsworth near Birmingham and a property in Newcastle-under-Lyme are all sold under the hammer.


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Transcript


LineFromTo

Hello, and welcome to the show.

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The housing stock across the UK has such variety,

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from Victorian villas to brand-new bungalows.

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Yet the trouble is, there's so much to choose from.

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I mean, that is the problem, where do you start?

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Well, whatever you're looking for,

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you could find it waiting for you under the hammer.

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Bidding at auction is quite nerve-racking,

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but I've got to admit, I absolutely love it.

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Oh, me too, it's really exciting.

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But you do need to keep a cool head and not get too carried away.

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Yes. Did that happen to any of the buyers on today's show?

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Let's find out.

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This grand four-bedroom terraced house

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in London proves a firm favourite.

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SHE GASPS

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It's taken my breath away a bit. I just love houses like this.

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And without planning permission,

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I weigh up the odds for this plot in north Birmingham.

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Probability of you getting that planning permission,

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I'd say...eight out of ten.

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And will the buyer of this three-bed in Newcastle-under-Lyme

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end up losing out?

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They both said the best you're going to be able to get out of it is 110.

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-Yeah.

-I'm going to be at a loss at that point.

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All these properties have been sold at auction,

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and we'll find out who bought them

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and what they paid when they went under the hammer.

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You've bought it, madam, well done.

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Lucy's auction lot this time is in Eltham,

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a suburb in the south-east of London.

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It's located between Bromley and Catford,

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and not far from the bustling town centre

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and mainline train station and bus stations,

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you find tree-lined roads with good-sized family properties.

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Well, this is a lovely residential street with lots of

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grand Edwardian houses. So far, I really am impressed,

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but will that continue?

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Well, the property I am here to see is a four-bedroom end of terrace,

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and it had a guide price of £420,000.

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And it's this.

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Little bit eerie from the outside, but lovely.

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But before I head inside, the first thing I've noticed -

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no off-street parking,

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so that is something you can think about doing before you even walk

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through the front door.

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And there's certainly room to create parking

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for at least one car,

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though it would be nice to keep some of that front garden space.

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Not too spooky on the inside.

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In fact, it's absolutely fantastic!

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I would love to get my hands on a house like this!

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Ooh! It's everything I love, a big double-fronted Edwardian house,

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you've got a reception room either side, lovely traditional panelling.

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Everywhere I'm looking I can see cornicing, lovely ceiling height,

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just fantastic. So this is another reception room.

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Usually with a double-fronted house, if they're wide,

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they're not usually deep,

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but I'm glad to see that this one

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has rooms that go right the way back.

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Very spacious, and the big fireplace, well, an almighty crack.

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I'd probably get somebody structural to have a look at that.

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Hopefully, that's just because this house has stood for a period of time

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and nothing to worry about, but I'd get that double-checked anyway.

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But a great space here,

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beautiful French doors that lead out to the garden.

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SHE GASPS

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It's taken my breath away a bit.

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I just love houses like this. Brilliant!

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Usually about now I would make a joke

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about Lucy's rose-tinted glasses,

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but not in this case.

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OK, there is a lot of work to do, but what a project.

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It's just a bit like walking into a film set, this house,

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but I am loving it.

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The doors are all lovely and chunky,

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you've got beautiful sash windows everywhere, and out there, well,

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the garden is fantastic, it even goes beyond where the eye can see.

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I know just behind those bushes you've got a bit more space.

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And because of this L-shape,

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I just don't think the kitchen's big enough,

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so you could easily extend out there

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and even right the way across

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to make this a really good family-sized kitchen.

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But, my, it's incredible to look at a space like this.

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And down here you've got an old oil-fired sort of burner/stove -

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absolutely amazing.

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But something the new owner WILL have to take into account,

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they're going to going to have to save their pennies,

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because I think you might need a new boiler. Have a look.

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Blimey, that is a bit of a museum piece as well.

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As much I love original features, these might be past it.

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But there are some worth saving.

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Otherwise, this is a back-to-brick renovation.

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But what a shell to work with.

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There is even a downstairs cellar, where most, in fact, cellars are.

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While upstairs, on the half-landing, is the bathroom.

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And then there are four bedrooms, all good sizes,

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but all showing signs of damp and decay.

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But underneath all of this you can definitely see that this was once

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a grand and very special house.

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Now, I've been speaking to some of the neighbours,

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and apparently the properties along this road are Corbett houses,

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which means they were designed by architect Archibald Cameron Corbett.

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Now, Archibald, he wanted to promote

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healthy living and thriving communities,

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hence plenty of local facilities, large front and back gardens,

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and apparently he even insisted on an embargo on alcohol at the time.

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Luckily, that last point no longer applies, thankfully,

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but these gorgeous houses are part of his legacy.

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Well, most of them are anyway,

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and the one we're looking at hopefully will be too,

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once the renovation works are complete.

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MUSIC: You're A Wonderful One by Marvin Gaye

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And in fact, this Corbett house was built around the 1900s

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and is thought to be one of the first built on the road.

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Which means it's the oldest building, but also the largest.

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It was originally sold for £800,

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which was a lot of money in those days!

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What does a local estate agent make

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of this grand old and unique four-bedroom property?

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Properties like this are very unusual to come up nowadays

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within London boroughs, only because people have bought them

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and converted them so much into flats,

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so to see something like this is absolutely amazing

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and I love it. I love the fact that hopefully someone will buy it as

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a house and live in it, that would be the best thing for the house.

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Yes, relatively large untouched houses

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like this in London are becoming rare beasts.

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But if keeping it as a house is the best thing to do,

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how would it be best to enhance it for modern living?

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The house has got a very good-sized garden and it's quite a wide plot,

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and the way the layout is at the back, the footprint,

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you could extend quite easily right across the back,

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extending the kitchen.

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The off-street parking option, I think, should be done.

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Most of the houses down here have it,

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and there is sort of permit parking on the road as well,

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so, if it was me, I would definitely put off-street parking in.

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This house was guided at 420,000, but it's going to take -

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at the very least - 100,000 to get it up to standard,

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so could this one be worth investing in?

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If it was to be renovated,

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have the extension put on the back for a larger kitchen/dining area,

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giving more foot space to the ground floor level and off-street parking

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was put in, I'd place the value at £700,000.

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And the agent reckoned that if this property found its way

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into the rental market, a monthly rent of £1,600 per month

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might be possible.

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Yep, you get a whole lot of property with this end-of-terrace house,

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and I love it.

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But you also get a whole lot of work, too.

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But once it's brought back to its former glory...

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I think this could make a gorgeous home for someone.

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I just hope whoever bought this has plenty of renovation experience

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under their belt. Let's find out who that buyer was

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when we went to auction.

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Lot 40, end-of-terrace double-fronted house.

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Who would like to kick off on this,

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nice, big double-fronted house, Eltham?

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How much, 480? 480 down here, 480.

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485. 500?

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That's what I'd do, 500.

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505? 510. 510 with you, madam?

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515. 520.

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Well, after a tentative start, things really hotted up,

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and we rejoin the bidding at 595,000.

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595, 596, 597.

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598? 598.

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599? Nearly. 600.

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601? 602?

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601 first time, second time, third and last time...

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Sold, 601.

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So, for a whacking £181,000 above the guide price,

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and for £601,000,

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the grand old Eltham house was sold to Damon and his wife Penny.

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Damon is a paramedic leader,

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while Penny works in the retail sector as a senior merchandiser,

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and they have two children, Joshua and Ella.

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I'm delighted to say the house is going to be their new family home.

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Lucy caught up with Penny to tell us more.

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-Penny, it's lovely to meet you today.

-You too, Lucy.

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I love this house! Full of character.

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Is it the character that inspired you to want to buy this?

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Totally, really, yes.

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It's a beautiful period property and there's so much potential.

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I've lived in Eltham for about 18 years,

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and I've always wanted to live in this road,

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and I walk past it quite frequently when I take my children

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to and from school. And, yeah,

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I'm really excited to have the opportunity to live here.

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So what happened, did you see the auction sign go up, did you think,

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-"I'd love to live there!"

-Yes. Actually, the next-door neighbour

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came round to tell me, cos we'd walked by it

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and I'd wondered for a while

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what was going to happen to this house and thought,

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"Oh, wouldn't it be great if we could live there?"

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And he actually came round and said, "It's going up for auction."

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It's a bit like, "Oh, my word!"

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And very, very quickly, obviously, you have to move.

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So when the hammer went down on auction day, tell me how you felt?

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Really emotional.

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At the viewings, there were so many developers in here,

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so many people in here, and I thought we hadn't got a chance,

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but we went along, thought, "Nothing to lose,

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"we know our budget, let's just go and see",

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and as you're going along

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you're suddenly starting to think,

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"Actually, we might actually get this."

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And then when it went down, I was just really, really emotional.

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So you had already fallen in love with the property?

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Yeah, but I was trying not to!

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You know when you think, "I'm not going to get it"?

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so I was trying to be reserved,

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but, yeah, I had fallen in love with it.

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Having recently sold their own house,

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they are currently living with Penny's parents,

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but with both children going to nearby schools,

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you can see whyy Penny was so keen to get this house,

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though it is far from ready to move into.

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It's a full refurbishment, so everything will have to...

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You know, it's the wiring, the heating, the floors, the internals.

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It's a bare brick job, isn't it?

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There's no kitchen! There's an Aga and a butler's sink, and that's it!

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I think you'll be keeping that butler's sink!

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-Yeah.

-You'll be keeping everything!

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We want to try and retain as much of it as we can,

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because there's so much that it needs to be refurbished,

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but I'm really keen it's restored

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and it's restored to how it should be,

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rather than just being modernised.

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-What about an extension?

-Yes.

-Are you planning on going out?

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Yeah. I like the proportions downstairs,

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and I don't really like walls to be knocked through,

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because I think that it was built

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with such beautiful proportions, I want to retain that,

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but what we would like to do

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is have an open living family space also,

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so our plan is to go all the way across the back

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with, like, a big kitchen diner,

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so we've got a family room for everyone to congregate in,

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but then also everyone can have their own space.

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How much do you think you're going to need to spend here

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to really get it how you want it?

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Yeah. Well, at the moment, our budget is 150K.

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Along with that proposed £150,000 budget,

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they hope to get planning permission for the extension

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and for their builders to complete the work in 6-9 months.

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So taking into account the vast amount of work that needs

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-to be done here...

-Yeah.

-..have you done much DIY yourself before?

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Nothing on this scale, no.

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So you really will be leaning on your builder and taking his lead?

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Totally, yeah.

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Totally trust him and, yeah,

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he's renovated houses like this in the past, in fact,

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he lives in one quite similar, so, yeah, we trust him.

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Penny, I'm so excited to see what you do,

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I know it's going to be amazing, and it's a project from the heart.

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-Congratulations.

-Thank you, Lucy.

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Well, Penny may have paid way over the guide price for this house,

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but it's going to be her family home,

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and I am sure there will be plenty of priceless memories made

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once they are living here. But before that happens...

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there's a lot of work to do, and Penny and her family

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haven't tackled anything this big before.

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Hmm! Join me later in the programme

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and you can find out if this family

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are going to live happily ever after in their new Eltham pad.

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I am just north of Birmingham,

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near one of the city's most famous landmarks.

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Is it the Bullring? Nope.

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Is it their marvellous canal system? No, no, no.

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It's the football ground of West Bromwich Albion,

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the team known as "the Baggies".

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They are currently playing Premiership football.

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The question is, what league will the property be in today,

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and will I BAGGIE myself a bargain?

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Well, the lot I'm here to see is in an area called Handsworth,

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literally just round the corner from the football ground.

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It's known as a transitional area, lots of people coming and going,

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but it's a good place to get your foot on the property ladder.

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Although it will be a while before you can inhabit the lot I'm here

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to see, because it is in fact a plot of land.

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Guide price was 40,000 quid, and it's behind this fence.

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HE GRUNTS

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Well, no problem with access, then,

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we're right on a reasonably busy road with houses left and right.

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It's a promising start.

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So what lurks behind the gate?

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-Well...

-HE LAUGHS

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A big plot of land, that's what lurks behind the gate.

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It stretches all the way down to that fence in the distance.

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God, a fairly long way, that is.

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A good size in terms of width.

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At the moment, it doesn't have planning permission.

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If it did, it would be a lot more expensive.

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So what are the options here?

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Well, you could buy it and just get that planning permission,

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there are people who specialise in doing that,

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because you can dramatically increase the land's value

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when you do. Or you could buy it, get the planning permission

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and then build whatever you're thinking about.

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Certainly, in terms of getting planning permission,

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I think a fairly good chance of getting residential use on here,

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maybe for a block of flats, maybe for a pair of semis or whatever,

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it really depends on what the local planning authority's policy

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is at the moment. But in terms of where it is,

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residential on that side,

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residential on that side, local amenities...

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In terms of the probability of you getting that planning permission,

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I'd say, ooh, eight out of ten.

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You can never be 100% certain when it comes to land

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and planning permission, but in an area like this,

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with this land serving no real purpose,

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it's unlikely that any reasonable residential plan would be refused.

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There's plenty of room, the land is almost flat

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and you only have one tree to contend with.

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On a sunny day like today, it's actually very pleasant.

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But does that mean your development will come up smelling of roses,

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or will this site end up soaking up all the profits?

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MUSIC: Soak Up The Sun by Sheryl Crow

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So let's say you apply for planning permission, you get it for, say,

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a couple of semidetached properties.

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Hurray! But what then? Well, unfortunately,

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the resale market around here is very depressed at the moment,

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so it's unlikely you're going to be able to sell whatever you build,

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so it's going to really be a buy-to-let investor who does this,

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because the rental market, on the other hand,

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around here is extremely good, £550 a month on average for a semi.

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So, build them, but really concentrate

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on keeping the costs of build down,

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and you could still be on the money.

0:17:090:17:12

Hitting the right market for new builds is no easy task.

0:17:220:17:26

The whole process can take time,

0:17:260:17:27

during which build costs and market prices

0:17:270:17:30

can be constantly changing, so to be in the money,

0:17:300:17:33

be prepared for the long haul.

0:17:330:17:34

But what does an agent from the auction house

0:17:400:17:43

that sold the site think should be built here?

0:17:430:17:47

I think it's almost inevitable it's going to be houses.

0:17:470:17:50

You wouldn't build an apartment in the current market,

0:17:500:17:52

and you're likely to build... You might just squeeze in three,

0:17:520:17:54

but I think you're more likely

0:17:540:17:56

to get two in, onto the site.

0:17:560:17:58

And what might two three-bed houses achieve on the current sales market?

0:17:580:18:03

If you got a planning permission for, say, two semidetached houses,

0:18:030:18:06

three bedrooms, you're probably looking at

0:18:060:18:08

about £100,000 per dwelling.

0:18:080:18:10

So, potentially £200,000 in total,

0:18:120:18:15

and with rentals in the area running at around £500 per month,

0:18:150:18:19

this is definitely a case where you've got to be careful not to

0:18:190:18:22

overdevelop the site, as you simply won't get the return.

0:18:220:18:26

Well, the plot may look cheap,

0:18:270:18:29

but it's an area that isn't scoring too many goals

0:18:290:18:32

on the resale front,

0:18:320:18:33

so whoever bought it needs to play the long game,

0:18:330:18:37

and maybe turn build-to-let investor,

0:18:370:18:40

and strike it rich on the rental market while that's hot.

0:18:400:18:45

Let's see who bought it when it went under the hammer.

0:18:450:18:48

Lot seven. It's a vacant freehold development.

0:18:500:18:52

Where shall we start, folks?

0:18:520:18:54

Start me, if you will. 40,000 anywhere?

0:18:540:18:57

35? 30?

0:18:570:19:00

25,000 then?

0:19:000:19:02

At 25,000, what a buy this is going to be.

0:19:020:19:04

-Where am I?

-MUFFLED REPLY

0:19:040:19:06

Thank you. And have you got a banker's draft, sir?

0:19:060:19:09

At 25,000 I'm bid, thank you.

0:19:090:19:11

26 is that, sir?

0:19:110:19:12

26. 27, sir? 28?

0:19:120:19:15

After chopping 15 grand off the initial guide price,

0:19:160:19:19

the bids finally started rolling in.

0:19:190:19:22

We rejoin with the price at 42,000.

0:19:220:19:24

I've got 42 at the front.

0:19:260:19:28

Is it 43 at the back?

0:19:280:19:29

No, I'm not going to do halves, sir, I can't,

0:19:310:19:33

we've got so much to go. 43, thank you.

0:19:330:19:34

43. Is it 44? 44. 45?

0:19:340:19:37

45, thank you. Is it 46?

0:19:370:19:40

Yep? With a smile.

0:19:400:19:42

46. 47?

0:19:420:19:43

No. At £46,000, then, on my right, are we all done?

0:19:430:19:49

One, two, three...

0:19:490:19:50

GAVEL BANGS

0:19:500:19:51

Congratulations.

0:19:510:19:53

So, for £6,000 over the guide price,

0:19:550:19:57

the new owners of the Handsworth site

0:19:570:20:00

are friends and business partners Gurmit,

0:20:000:20:02

on the right, and Hamej.

0:20:020:20:05

I met them back at the site to find out the all-important issue -

0:20:050:20:08

what's it going to be?

0:20:080:20:10

-Congratulations.

-Same to you.

-Thank you.

0:20:170:20:19

Tell me why you wanted to buy the plot?

0:20:190:20:21

We buy the plot to build a house.

0:20:210:20:23

-Right.

-Going to build at least two houses, three-bedroom houses.

0:20:230:20:28

But if we can get more small houses, for letting it,

0:20:280:20:32

it would be good for us.

0:20:320:20:34

So the maximum number of houses you could get on here?

0:20:340:20:36

Maximum three, but minimum two.

0:20:360:20:38

Semidetached, terraced, detached, or what?

0:20:380:20:41

If it's semidetached, it would be two, one pair of semi.

0:20:410:20:44

If it's a terrace, probably three.

0:20:440:20:46

And then tell me the build costs?

0:20:460:20:49

Well, we thought about this, build cost.

0:20:490:20:51

If it's two, I'd think 140 for both to be complete.

0:20:510:20:56

If it's three, it's... 170, 180.

0:20:560:21:00

Adding the £140,000 build costs

0:21:020:21:05

to the £46,000 purchase backs up what I said earlier.

0:21:050:21:08

If you build houses here,

0:21:080:21:11

it's the rental return that will make this development work.

0:21:110:21:14

# Work, work, work, to make it work... #

0:21:140:21:18

So tell me about you two.

0:21:180:21:20

What's the relationship, and how do you work together?

0:21:200:21:22

The relationship, good friend.

0:21:220:21:25

Very good friend.

0:21:250:21:26

We know each other for the last five, six years.

0:21:260:21:30

And we've got another piece of land

0:21:300:21:32

which has been building eight houses.

0:21:320:21:35

-Oh, right!

-So, together.

0:21:350:21:37

So the partnership works well?

0:21:370:21:39

-Yeah.

-Yes, of course, partnership's working very, very well.

0:21:390:21:43

I do say, I love to do this sort of work.

0:21:430:21:47

Are you actually going to get involved in the build,

0:21:470:21:49

do you have a team of builders? Do you actually get your hands dirty?

0:21:490:21:52

Yes, yes. Oh, yes, of course I do.

0:21:520:21:54

Well, I'm professionally a plumber.

0:21:540:21:56

-Oh, great.

-Right.

-And ongoing, what will your involvement be?

0:21:560:22:00

I do the buying and organise...

0:22:000:22:05

-The material.

-..the material side,

0:22:050:22:08

and he's the supervisor on the sites.

0:22:080:22:11

Gurmit used to work in the clothing business,

0:22:120:22:15

but became interested in building around ten years ago,

0:22:150:22:19

while Hamej has been a plumber and heating engineer for 30 years

0:22:190:22:23

and previously worked for the local council.

0:22:230:22:25

They teamed up a few years ago,

0:22:250:22:27

and at present are busy building on another site.

0:22:270:22:30

-So what's the timescale?

-Timescale...

0:22:310:22:34

It's up to, uh...

0:22:340:22:37

8, 9 to 10 months, 12 months.

0:22:370:22:40

Same time, we're going to work these, the other one.

0:22:400:22:42

-Oh, right, you bought the plot of land opposite as well?

-That's right.

0:22:420:22:46

Well, that's a turn up.

0:22:460:22:47

In fact, the plot opposite was their main target at the auction,

0:22:470:22:50

and this £46,000 buy was actually a bonus.

0:22:500:22:54

Came to buy the plot opposite, expecting to pay 100,000.

0:22:560:23:00

-We bought it for 64.

-64.

0:23:000:23:02

-Right, so it's almost like you got this plot for free.

-Two-for-one.

0:23:020:23:06

-MARTIN LAUGHS

-Buy one, one free.

0:23:060:23:09

Result! Well, listen, congratulations, good luck with it.

0:23:090:23:12

-Thank you very much.

-I look forward to seeing how you get on.

0:23:120:23:14

-Thanks very much.

-Thank you.

0:23:140:23:16

So, two plots for 100 grand and two plots without planning permission.

0:23:170:23:21

It's a gamble, and with their other building commitments,

0:23:210:23:24

this is going to be a busy period for the pair.

0:23:240:23:27

# It's gonna be, it's gonna be... #

0:23:300:23:35

Well, Hamej and Gurmit haven't just bought themselves

0:23:360:23:38

two plots of land here, they've got themselves a rental portfolio.

0:23:380:23:41

They're going to have to keep a tight rein on the build budget,

0:23:410:23:45

but I'm delighted they've gone down the build-to-rent route.

0:23:450:23:48

I think it's the only way to go.

0:23:480:23:50

Find out how they get on turning this grassland into a housing estate

0:23:500:23:55

later in the show.

0:23:550:23:57

Still to come, I find a fan in Newcastle-under-Lyme.

0:23:580:24:01

I've been watching your show, as many people say.

0:24:010:24:04

-You've inspired me.

-Get in there!

0:24:040:24:05

-It's true, you have so inspired me.

-Thank you.

0:24:050:24:08

And Gurmit has sound advice for would-be developers.

0:24:100:24:13

I'd tell them to get out of bed and get on with it!

0:24:130:24:17

Back now to the leafy streets of Eltham in south-east London,

0:24:220:24:26

where Lucy fell in love with a magnificent

0:24:260:24:28

double-fronted Edwardian house

0:24:280:24:30

which was guided at an intriguing £420,000 plus,

0:24:300:24:35

and it has some interesting original features, outside and in.

0:24:350:24:39

And while we do love an original detail,

0:24:390:24:42

sometimes things just have to go.

0:24:420:24:45

There was no getting away from it, this was a back to brick renovation,

0:24:450:24:49

but Lucy had already fallen for this house, hook, line and sinker.

0:24:490:24:53

Everywhere I'm looking I can see cornicing, lovely ceiling height.

0:24:530:24:58

SHE GASPS

0:24:580:24:59

It's taken my breath away a bit.

0:24:590:25:01

I just love houses like this. Oh, brilliant!

0:25:010:25:04

Lucy was enchanted by this place.

0:25:050:25:08

The potential to create a magical family home was tantalising.

0:25:080:25:12

And when it came to auction, it was husband and wife Damon and Penny

0:25:120:25:15

who were successful with a bid of £601,000.

0:25:150:25:19

Third and last time...

0:25:190:25:20

Sold, 601.

0:25:220:25:24

And for Penny, this was the realisation of a lifelong dream.

0:25:240:25:29

I've lived in Eltham for about 18 years

0:25:290:25:32

and I have always wanted to live in this road.

0:25:320:25:34

# But if I had one chance to freeze time

0:25:340:25:39

# And stand still and soak in everything... #

0:25:390:25:44

Yeah, I think we'd all have a jam, wouldn't you?

0:25:440:25:47

# I'd choose right now... #

0:25:470:25:49

Before it could be Penny's dream family home,

0:25:490:25:52

there was a lot of work to do,

0:25:520:25:54

but Penny was keen to retain the feel of the original building.

0:25:540:25:57

I don't really like walls to be knocked through,

0:25:580:26:01

because I think it was built with such beautiful proportions,

0:26:010:26:03

I want to retain that,

0:26:030:26:05

but what we would like to do is have an open living family space also,

0:26:050:26:09

so our plan is to go all the way across the back

0:26:090:26:12

with, like, a big kitchen diner,

0:26:120:26:14

so we've got a family room for everyone to congregate in,

0:26:140:26:17

but then also everyone can have their own space.

0:26:170:26:20

So, with a full refurb and rear extension planned,

0:26:220:26:25

Penny and family had a budget of 150,000

0:26:250:26:28

and a timescale of 6-9 months.

0:26:280:26:31

We returned 20 months later,

0:26:350:26:37

and I can see that the facade of the house has been restored.

0:26:370:26:41

Lucy thought that there was room for off-street parking here,

0:26:420:26:46

and that's exactly what they've done.

0:26:460:26:49

But how does it look inside?

0:26:490:26:52

# Ah, home, let me go home

0:26:520:26:57

# Home is where I'm with you... #

0:26:570:27:01

It's almost unrecognisable.

0:27:010:27:03

The lounge is bright and stylish,

0:27:030:27:05

while still retaining some of the period features and wooden flooring.

0:27:050:27:09

The modern but sympathetic decor has been used to great effect

0:27:090:27:12

in the family library. What a lovely thing to have.

0:27:120:27:17

# La-la-la-la, take me home

0:27:170:27:21

# Mama, I'm coming home... #

0:27:210:27:24

Penny's dream was to have a fabulous family living area

0:27:240:27:27

and kitchen at the back.

0:27:270:27:30

They've built a lovely extension to the house,

0:27:300:27:32

a bright and airy kitchen diner and, like the rest of the property,

0:27:320:27:36

it has been finished to an exceptional standard.

0:27:360:27:39

So, how did they approach this massive project?

0:27:410:27:44

So, we wanted to retain as much of the character of the original house

0:27:440:27:47

as we could, but wanted to create something that was good

0:27:470:27:51

for a modern family. So we've kept, out the front,

0:27:510:27:53

the original living room, and also we've converted

0:27:530:27:55

one of the smaller rooms in the front to a library.

0:27:550:27:59

And then we've added a downstairs bathroom, and also a utility room,

0:27:590:28:03

and made a big family room at the back

0:28:030:28:05

which extends round to a big kitchen diner.

0:28:050:28:08

Well, the new layout has certainly taken advantage

0:28:090:28:12

of all that outside space.

0:28:120:28:16

And the good work continues upstairs, to the half-landing -

0:28:160:28:19

that ancient bathroom, which has yet again had a modern makeover.

0:28:190:28:24

The four previously dark and dingy bedrooms are now all

0:28:290:28:33

in pristine condition. You can really see

0:28:330:28:35

Penny's attention to detail with the use of

0:28:350:28:38

reclaimed fireplaces in each room,

0:28:380:28:40

and the refurbished original flooring,

0:28:400:28:42

which now looks good as new.

0:28:420:28:45

We've completely refurbished the whole house,

0:28:460:28:49

so that involves taking the ceilings out, the walls out,

0:28:490:28:52

rebuilding them, plastering them, new floors throughout.

0:28:520:28:56

Penny and Damon engaged a builder

0:28:560:28:58

who has renovated these types of houses previously,

0:28:580:29:00

and when it came to dealing with those horrible cracks,

0:29:000:29:04

he knew exactly what to do.

0:29:040:29:06

So, luckily, we had a great builder

0:29:060:29:08

who is a really good engineer as well,

0:29:080:29:11

so he's knitted the bricks together,

0:29:110:29:13

so there's no structural problems any more.

0:29:130:29:16

# I should be so lucky... #

0:29:160:29:20

Joshua and Ella are also lucky.

0:29:200:29:22

They have pretty cool bedrooms to show off to their schoolmates.

0:29:220:29:26

The house is wonderful, a great mix of modern and character,

0:29:260:29:30

but was that healthy 150 grand budget enough?

0:29:300:29:34

We did go over, we went about £10,000 over.

0:29:340:29:37

However, we did do more things

0:29:370:29:39

during the project than we had initially

0:29:390:29:41

intended to, so examples of that might be boarding the loft,

0:29:410:29:45

adding low-level lighting.

0:29:450:29:47

We also added the patio out the back and we overspent on the kitchen,

0:29:470:29:52

but intentionally.

0:29:520:29:54

Well, I reckon it was worth it.

0:29:540:29:56

And £10,000 over budget on a project this size isn't bad at all.

0:29:560:30:00

But did they stick to their schedule?

0:30:000:30:02

So, the bulk of the work at the house took about a year.

0:30:040:30:07

We moved in, and then there were some small parts

0:30:070:30:10

of works going on around us.

0:30:100:30:11

So, all in all, from start to finish, it's been about 18 months.

0:30:110:30:15

So, a fair bit over the estimate of six to nine months,

0:30:170:30:20

but all in all they have achieved their goal of a dream family home.

0:30:200:30:25

What do two local estate agents think of this project?

0:30:250:30:29

Let's start with the agent who saw it originally.

0:30:290:30:33

Well, since I was here last time, I must say, the changes are amazing.

0:30:330:30:36

It's transformed the house.

0:30:360:30:37

I mean, you wouldn't think it was the same house.

0:30:370:30:39

They may as well have knocked it down and rebuilt it!

0:30:390:30:41

It looks absolutely fantastic.

0:30:410:30:43

The standard of finish is very good on the property.

0:30:430:30:45

I think they've done it very, very well.

0:30:450:30:47

I like the flooring throughout.

0:30:470:30:49

The high ceilings were obviously really good.

0:30:490:30:51

It's decorated really well.

0:30:510:30:52

Yeah, I think it's done very nicely.

0:30:520:30:54

The extension at the back, that has really opened the house up

0:30:540:30:57

in depth, and size-wise, to make such a good feel.

0:30:570:30:59

They've kept some of the original features

0:30:590:31:02

and feeling of the house, but modernised around it.

0:31:020:31:05

So it looks really good.

0:31:050:31:07

Well, the agents seem impressed.

0:31:070:31:09

So with a total spend here of £761,000,

0:31:090:31:13

what did they think the house could now be worth?

0:31:130:31:15

If this property came onto the open market for sale purposes today,

0:31:170:31:20

I would put the property on the market at £900,000 to £950,000.

0:31:200:31:24

I believe the house would achieve between £850,000 and £900,000.

0:31:240:31:29

Well, Penny always wanted to live on this street,

0:31:290:31:31

so it seems unlikely she'd give up her dream home,

0:31:310:31:35

even for £189,000 pre-tax profit, based on the highest figure.

0:31:350:31:41

Your thoughts, Penny?

0:31:410:31:43

It's nice to get a return on your investment.

0:31:430:31:46

It's not hugely relevant to us,

0:31:460:31:48

because we hope that we will never move,

0:31:480:31:50

and we hope this is our home forever.

0:31:500:31:52

But, yeah, it's nice to hear.

0:31:520:31:54

We're in Newcastle-under-Lyme for our next property.

0:31:580:32:01

It's a town sandwiched between the city of Stoke-on-Trent

0:32:010:32:05

and the ever-expanding campus of Keele University.

0:32:050:32:08

Founded in 1962,

0:32:090:32:11

Keele has come out top on a national student satisfaction survey

0:32:110:32:15

for the last three years running.

0:32:150:32:17

Top marks! The presence of students means a ready supply

0:32:170:32:21

of potential rentals, so property developers

0:32:210:32:24

could keep an eye on Newcastle-under-Lyme.

0:32:240:32:27

It could be worth it.

0:32:270:32:28

The property I'm here to see is not far from the town centre,

0:32:350:32:38

has great links to Nantwich and Crewe, and here it is.

0:32:380:32:42

It's a three-bed property, has a guide price of £85,000,

0:32:420:32:48

and it's an end terrace as well.

0:32:480:32:50

I'm not hanging about out here, I'm getting in there.

0:32:500:32:52

Not a nice day today.

0:32:570:32:59

OK, into a porchway here with your stairs going up to the bedrooms.

0:32:590:33:04

But you come straight into a good-sized lounge area

0:33:040:33:07

with double glazing as well. And central heating.

0:33:070:33:12

It looks like somebody may have started the decorating already,

0:33:120:33:14

taking some wallpaper off.

0:33:140:33:16

But it's a nice, good-sized lounge area,

0:33:160:33:18

and the floor, as well, looks in good condition.

0:33:180:33:21

And it links you straight into the kitchen.

0:33:210:33:25

Which is, again, a nice-sized kitchen.

0:33:250:33:28

The units look in good condition.

0:33:280:33:31

There's a few tiles missing from the walls,

0:33:310:33:33

but that's not a problem to sort out.

0:33:330:33:36

And you've got a downstairs toilet as well, and a bit of storage space.

0:33:360:33:40

From what I've seen so far, I am liking. Good stuff.

0:33:400:33:44

Of course, if you're willing to sacrifice the downstairs loo

0:33:470:33:51

and storage cupboard, there would be enough scope

0:33:510:33:53

to use this space to open up the kitchen

0:33:530:33:55

and maybe get a table and chairs in.

0:33:550:33:57

Right, up to the three bedrooms.

0:33:590:34:02

And here we are. OK, as soon as you come upstairs,

0:34:030:34:06

you've got the family bathroom to your right.

0:34:060:34:08

It's a good-sized family bathroom, lots of floor space in there.

0:34:080:34:12

Looks in half decent condition.

0:34:120:34:15

Huge first bedroom to the front of the house,

0:34:150:34:18

right there, with fitted wardrobes.

0:34:180:34:20

Two further bedrooms, one in there.

0:34:200:34:23

You'd get a double bed in there no problems.

0:34:230:34:25

And in here you've got a single bed in the box room.

0:34:250:34:28

You've got a wardrobe and desk as well,

0:34:280:34:30

so there's a bit of space up here, which is good.

0:34:300:34:33

I'm thinking Keele University is about half a mile away.

0:34:330:34:37

I know there's other student accommodation in the area as well.

0:34:370:34:42

So, why not think about creating another bedroom downstairs

0:34:420:34:47

with that lounge? Get some students in here

0:34:470:34:50

and, hopefully, you can maximise your money. It's just an option.

0:34:500:34:54

When the sun comes out,

0:34:550:34:56

what student wouldn't love a back garden to study in?

0:34:560:34:59

Well, this one's a bit on the small side,

0:34:590:35:01

but it would only take a weekend to sort out.

0:35:010:35:05

-# Students of life

-Students of

0:35:050:35:07

-# Students of life

-Students of

0:35:070:35:10

# Students of life, students of love... #

0:35:100:35:14

Since coal mining was a major industry

0:35:140:35:17

around Newcastle-under-Lyme,

0:35:170:35:19

the chances are high there may be

0:35:190:35:21

historic mining workings in the area.

0:35:210:35:23

Any movement to the foundations can

0:35:230:35:25

cause damage to the houses built above

0:35:250:35:28

or close to the old mines.

0:35:280:35:30

This one seems to be OK,

0:35:300:35:32

but if you are thinking of buying a house

0:35:320:35:35

that you know was an old mining area,

0:35:350:35:37

check the legal pack, see if there is a mining report in there.

0:35:370:35:42

If there isn't, get one done.

0:35:420:35:45

Because a lot of lenders are quite dubious to lend people money

0:35:450:35:49

to buy houses in areas like this.

0:35:490:35:52

What I would suggest is, just do your research.

0:35:520:35:54

And, please, read the legal pack.

0:35:540:35:57

I've got a good feeling about this property,

0:35:580:36:01

but we've invited along a representative

0:36:010:36:03

from the auction house who sold it to give us his thoughts.

0:36:030:36:06

First impressions are it's a very well proportioned

0:36:080:36:10

three-bedroom property. Could do with some off-road parking

0:36:100:36:13

to the front and a nice rear garden at the back,

0:36:130:36:15

so...ideally suit families within the area.

0:36:150:36:17

How much does he think would need to be spent on this refurbishment?

0:36:190:36:23

The works involved would be somewhere within the region

0:36:230:36:25

of £5,000 to complete.

0:36:250:36:27

Refurbished to a reasonable standard,

0:36:270:36:29

what could the house resell for on the current market?

0:36:290:36:33

Sale for a three-bed house in the area,

0:36:330:36:35

somewhere within the region of £105,000.

0:36:350:36:38

And if placed on the rental market?

0:36:380:36:41

For a three-bedroom house,

0:36:410:36:42

we would recommend the rental to be somewhere within the region of

0:36:420:36:45

£495 per calendar month.

0:36:450:36:47

And if the house was converted into student accommodation,

0:36:470:36:49

how much could each room let for?

0:36:490:36:53

If the property was converted into a student let,

0:36:530:36:55

we would recommend an asking price of £70 per week, per room.

0:36:550:37:00

I think this is a good, solid house.

0:37:010:37:04

It's in a good location,

0:37:040:37:05

and you've got the university less than a mile away.

0:37:050:37:08

Loads of potential with this project.

0:37:080:37:10

Let's see who fancied it when it went under the hammer.

0:37:100:37:13

Three-bedroom end townhouse,

0:37:150:37:17

gas central heating, UPVC double glazing.

0:37:170:37:19

And we'll say 70,000, start me on this.

0:37:190:37:22

70 on the front row, thank you.

0:37:220:37:23

At £70,000.

0:37:230:37:25

-I'm going once.

-The bidding soon got past the guide price of £85,000,

0:37:250:37:30

but bidders slowed things down with £500 increases.

0:37:300:37:34

We rejoin at 93 and a half grand.

0:37:340:37:37

93 and a half.

0:37:370:37:39

94. Half.

0:37:390:37:41

95, sir?

0:37:410:37:43

No? 94 and a half, then.

0:37:440:37:46

On the front row, not going to linger. 95 anywhere else?

0:37:460:37:49

If not, £94,500 once, £94,500 twice...

0:37:490:37:54

Third and final time, £94,500.

0:37:540:37:57

You bought it, madam. Well done.

0:37:570:38:00

# It's a long, long way from home... #

0:38:000:38:04

The successful bidder was Nancy.

0:38:040:38:07

Former electrical engineer Nancy is American,

0:38:070:38:10

but now lives in France with her husband

0:38:100:38:13

and daughters Piper and Naomi.

0:38:130:38:15

I met with Nancy and the girls to find out what their plans were.

0:38:150:38:18

-Nancy.

-Hi.

-Nice to meet you.

0:38:180:38:20

-Nice to meet you.

-And girls.

0:38:200:38:22

Naomi, nice to meet you, too. Piper, good to meet you.

0:38:220:38:25

You brought the weather with you, thank you.

0:38:250:38:28

Tell me first, why did you buy this house?

0:38:280:38:30

Um, I just liked the way that it was, um,

0:38:300:38:35

positioned, it was high up, like, on a hill.

0:38:350:38:37

This street is really nice, it's tree-lined.

0:38:370:38:40

And I think just the location.

0:38:400:38:41

And also, it's close to the university.

0:38:410:38:44

-Close to Keele.

-Yeah, exactly.

-Oh, and it's close to the university.

0:38:440:38:46

-Yes.

-Yeah.

-Exactly, which helps.

-Yes.

0:38:460:38:48

If that's in your plans, but we'll get to that in a minute.

0:38:480:38:51

What made you get into property?

0:38:510:38:53

Have you always wanted to get into property?

0:38:530:38:55

The weird thing is, my parents never owned a house, ever.

0:38:550:38:59

I actually didn't own a property

0:38:590:39:00

until I was married with children in my 30s.

0:39:000:39:03

And it just sort of hit me.

0:39:030:39:04

I mean, you hear of people getting the property bug.

0:39:040:39:07

From that point on, I just started liking property,

0:39:070:39:10

and then I've been watching your show.

0:39:100:39:12

As many people say. You have so inspired me.

0:39:120:39:14

-Get in there.

-It's true, you have so inspired me.

0:39:140:39:16

-Thank you, thank you, we try.

-It's so interesting.

-Good.

0:39:160:39:18

And over the years, I've just felt more and more confident,

0:39:180:39:21

so, yeah.

0:39:210:39:22

This is only Nancy's second auction purchase,

0:39:240:39:27

and although she might be a relative newcomer to the world

0:39:270:39:30

of property investment, she does have a keen eye for detail.

0:39:300:39:34

For example, did you spot something unusual with the brickwork?

0:39:340:39:38

The brickwork is newer, if you noticed,

0:39:380:39:41

-than the brickwork next door.

-Yes.

0:39:410:39:43

And I asked the person that was showing, from the auction,

0:39:430:39:46

"Why's the brickwork newer?"

0:39:460:39:47

And she said that it was at one time a mid-terrace.

0:39:470:39:51

They took off the other house,

0:39:510:39:53

and I think just to be able to make the brickwork uniform,

0:39:530:39:57

they just redid it on...

0:39:570:39:59

I don't know exactly how, but they did the brickwork, that's new.

0:39:590:40:03

OK. So it didn't put you off at all, you're happy?

0:40:030:40:05

-Yeah, it's fine. Got new brickwork!

-You've got new brickwork.

0:40:050:40:08

# Everbody's happy nowadays... #

0:40:080:40:16

Top marks for observation,

0:40:160:40:18

and she's also found out there's a flying freehold above

0:40:180:40:21

this communal entrance. But again,

0:40:210:40:24

it's not something she's worried about.

0:40:240:40:26

Actually, my solicitor said that

0:40:260:40:28

if you have an indemnity policy in place -

0:40:280:40:31

which is not a very expensive thing to purchase -

0:40:310:40:33

then that will cover that extra portion

0:40:330:40:36

of the home that doesn't belong to you.

0:40:360:40:37

It will cover that if somebody else wants to buy it

0:40:370:40:41

and needs a mortgage and the mortgage company says,

0:40:410:40:43

-"You know, hold on..."

-Yes, yes.

0:40:430:40:44

"..you've got to own all of the property",

0:40:440:40:46

-it's not an issue.

-Tell me what you're going to do to the property.

0:40:460:40:49

Originally, what I wanted to do was buy this, do it up,

0:40:490:40:51

extend it out the back.

0:40:510:40:52

-Yes.

-Make it big, open-plan.

0:40:520:40:54

-Yes.

-Even possibly go up into the loft and do a four-bedroom.

0:40:540:40:58

But I got some estate agents in,

0:40:580:41:01

and they both said the best that you're going to be able to

0:41:010:41:03

-get out of it is 110.

-OK.

0:41:030:41:05

And I thought, "That's just not..."

0:41:050:41:07

-That's... Yeah.

-I'm going to be at a loss at that point.

0:41:070:41:10

They said it's better as a student let.

0:41:100:41:12

Nancy had originally set her budget at 40 grand to do this work,

0:41:140:41:18

and that would have taken her total investment to nearly £135,000.

0:41:180:41:23

But since the maths didn't stack up, she's changed her plans.

0:41:230:41:26

What we're thinking of doing is creating the lounge into a bedroom,

0:41:260:41:31

a fourth bedroom. I don't think, because we have a big kitchen diner,

0:41:310:41:35

that they need yet another reception area.

0:41:350:41:38

So this, hopefully, can be turned into a bedroom.

0:41:380:41:40

To do that, we need to block the current entrance

0:41:400:41:43

from the lounge into the kitchen diner,

0:41:430:41:47

open up from what would be created, a new hallway or corridor,

0:41:470:41:50

open up an entryway into the kitchen diner.

0:41:500:41:54

-OK, got you.

-There is a little utility cupboard, a WC and so forth.

0:41:540:41:58

The problem is that a lot of that's structural,

0:41:580:42:01

and I just had a builder in yesterday.

0:42:010:42:03

Anything that is beyond a three-metre RSJ,

0:42:030:42:06

you have to get planning permission in,

0:42:060:42:08

and that can take who knows how long.

0:42:080:42:09

-Yes.

-And I don't have that much time.

0:42:090:42:11

-And that's time, isn't it?

-Because I only have two months.

0:42:110:42:14

So, over the summer, for the children's sake,

0:42:140:42:16

I'm going to have to return to France and back to school.

0:42:160:42:19

So we decided not to go that route, and those lovely little, you know,

0:42:190:42:23

areas back there will have to stay.

0:42:230:42:25

-We may be able to open up the pantry.

-Yes.

0:42:250:42:29

Another entryway, so that, essentially,

0:42:290:42:32

you'll have a corridor starting from the front...

0:42:320:42:34

-All the way to the back.

-..going down to the rear back.

-OK.

0:42:340:42:36

-So at least there'll be a little bit more freedom.

-Yes.

0:42:360:42:39

And flow as well. And flow as well.

0:42:390:42:41

-Exactly, exactly.

-So, in regards your budget,

0:42:410:42:43

to do all that work that you've told me,

0:42:430:42:45

-what is your budget?

-I'm thinking, realistically, maybe about 20,000.

0:42:450:42:49

-OK.

-Give or take.

-Listen, good luck.

0:42:490:42:51

All of you, good luck.

0:42:510:42:53

Naomi, good luck. Nancy, I wish you all the best.

0:42:530:42:55

Thank you. And, Piper, you can be the boss, OK?

0:42:550:42:58

SHE LAUGHS Good on you.

0:42:580:43:00

So Nancy has done her research,

0:43:000:43:02

and she's going to go down the student let route,

0:43:020:43:04

which I think is spot-on for two very good reasons.

0:43:040:43:08

The first one being, she's going to be using half

0:43:080:43:11

of her original budget,

0:43:110:43:12

and she's going to be getting a better return on her money.

0:43:120:43:16

Now, for someone with Nancy's background, it's not rocket science.

0:43:160:43:20

You can find out how she gets on later in the programme.

0:43:200:43:23

Well, we've seen how developer number one got on.

0:43:270:43:29

What about number two and three?

0:43:290:43:31

Yes, will they be teacher's pets or sent to the headmaster's office?

0:43:310:43:35

Ha-ha. Let's find out.

0:43:350:43:38

It's time to return to north Birmingham,

0:43:380:43:40

where, earlier in the show,

0:43:400:43:42

I took a trip back to nature on this vacant plot in Handsworth.

0:43:420:43:47

# The birds and the bees are flying in the trees... #

0:43:470:43:52

The birds and the bees would have to vacate this corner of Birmingham,

0:43:520:43:55

because at first glance, with a guide price of £40,000,

0:43:550:43:58

this appeared to be an ideal opportunity for a developer.

0:43:580:44:03

But buyer beware.

0:44:030:44:04

This land was for sale minus the all-important planning permission.

0:44:040:44:09

And there were local market conditions to consider, too.

0:44:090:44:13

Well, unfortunately,

0:44:130:44:14

the resale market around here is very depressed at the moment.

0:44:140:44:18

So it's unlikely you're going to be able to sell whatever you build.

0:44:180:44:22

So it's going to really be a buy-to-let investor who does this.

0:44:220:44:26

So, whoever took this on would have to take real care in planning

0:44:280:44:32

the right development, at the right cost, aimed at the right market.

0:44:320:44:35

And it was business partners Gurmit and Hamej

0:44:370:44:41

who paid £46,000 for this site.

0:44:410:44:44

They were on a bit of a buying spree,

0:44:440:44:46

as they purchased the land across the road at the very same auction.

0:44:460:44:50

Came to buy a plot opposite, expecting to pay 100,000.

0:44:500:44:54

-We bought it for 64.

-64.

0:44:540:44:56

Buy one, one free.

0:44:560:44:57

ALL LAUGH

0:44:570:44:58

Their plans were a bit sketchy for this side of the street,

0:44:580:45:02

but one thing was for sure...

0:45:020:45:03

We're going to build at least two houses.

0:45:030:45:07

But if we can get more small houses, for letting it,

0:45:070:45:11

it would be good for us.

0:45:110:45:12

That was over five years ago.

0:45:150:45:17

Have their plans come to fruition,

0:45:170:45:19

or have Gurmit and Hamej allowed the grass to grow under their feet?

0:45:190:45:23

We're back to find out.

0:45:230:45:24

# You ain't seen nothing yet

0:45:260:45:28

# B-b-b-baby, you just ain't seen nothing yet

0:45:280:45:31

# You need educatin'! #

0:45:310:45:33

Well, no houses to speak of, but there are signs that, finally,

0:45:330:45:38

things have started to happen.

0:45:380:45:39

Planning permission has been granted for three three-bedroom houses,

0:45:390:45:43

a three-bed detached to the front of the site

0:45:430:45:45

and two three-bed semidetached at the back.

0:45:450:45:49

Better than we thought. We thought we might only get two houses,

0:45:490:45:52

but we got three instead of two.

0:45:520:45:54

This is the ground floor, lounge,

0:45:540:45:57

kitchen diner and toilet at the back.

0:45:570:46:00

And garden is at the rear.

0:46:000:46:02

Upstairs, three bedrooms, one with en suite.

0:46:030:46:08

Nice, big three bedrooms.

0:46:080:46:10

The plans look good on paper, and work has started

0:46:120:46:15

on the semidetached houses, but one thing is missing from this set-up.

0:46:150:46:19

Gurmit and Hamej have parted ways.

0:46:190:46:22

# Breaking up is hard to do... #

0:46:220:46:26

That was my other partner, Hamej.

0:46:260:46:28

We're still friends, but he has nothing more to do with this plot.

0:46:280:46:32

With Hamej bowing out of the project,

0:46:320:46:35

Gurmit has recruited his son Inderjit

0:46:350:46:37

to help with this property development business.

0:46:370:46:40

I can't go on forever.

0:46:400:46:42

I have to bring my grandson and Inderjit into it

0:46:420:46:46

to make it a bit more interesting,

0:46:460:46:49

and hopefully I carry on with my other portfolio.

0:46:490:46:54

That's all for the future, but what about the here and now?

0:46:550:46:58

How much longer will Gurmit need to complete this built?

0:46:580:47:01

Hopefully, about six months should be enough.

0:47:030:47:05

But tomorrow, we've got the contractors coming in.

0:47:050:47:08

They will finish it, bring it up to damp course,

0:47:080:47:12

and then we get on with the drainage.

0:47:120:47:15

And after drainage, order some block and beams.

0:47:150:47:19

And put the floor in.

0:47:190:47:21

And, hopefully, within two to three weeks, we'll start the next stage.

0:47:210:47:27

And what state are the finances in?

0:47:270:47:29

Five years ago, Gurmit was planning to spend

0:47:290:47:33

between £140,000 and £180,000 on developing this site.

0:47:330:47:36

Up to now, will we've spent approximately 20,000

0:47:370:47:40

from...the start to this level.

0:47:400:47:45

We're hoping to get them finished within 250 to 300,000.

0:47:450:47:51

That is a huge leap in costs, but Gurmit will have three houses,

0:47:510:47:55

one of them detached.

0:47:550:47:56

From the outset, this development required

0:47:560:47:58

careful planning and careful spending.

0:47:580:48:01

Will it pay off for Gurmit?

0:48:010:48:03

We asked two local property experts to have a look around

0:48:050:48:09

and give us their verdict.

0:48:090:48:12

Obviously, modern new-build properties in this location

0:48:120:48:15

is going to be more attractive

0:48:150:48:17

because it's normally an area of

0:48:170:48:19

traditional Victorian or Edwardian

0:48:190:48:21

two and three-bedroom terraced houses.

0:48:210:48:23

With regards to the spec and the look and the finish,

0:48:230:48:26

I'd assume that he should keep it traditional

0:48:260:48:28

and in keeping with the rest of the area,

0:48:280:48:29

as regards the outside of the property.

0:48:290:48:31

The inside needs to be as high spec as possible.

0:48:310:48:34

Gurmit has squeezed an extra unit

0:48:340:48:36

onto this modest-sized plot - any concerns?

0:48:360:48:40

If I was going to do something different,

0:48:400:48:42

I would have probably put two decent-sized houses.

0:48:420:48:45

From what we can see from the plans,

0:48:450:48:47

I would have probably recommended a bit more open-plan living

0:48:470:48:51

to meet modern requirements,

0:48:510:48:53

and I certainly would have put French doors into the rear garden.

0:48:530:48:56

And so to valuations.

0:48:560:48:58

With Gurmit's costs set to rise to as much as 300,000,

0:48:580:49:02

he'll be looking for some good news here.

0:49:020:49:04

First, resale values.

0:49:040:49:06

The three-bedroom semi at the back, I'd value at around 135,000

0:49:060:49:09

depending on the spec that he finished it to.

0:49:090:49:12

The property at the front, I'd value at around 135 to £140,000

0:49:120:49:15

if it was a detached property.

0:49:150:49:16

The three-bedroom semis I would actually value

0:49:160:49:19

between £130,000 and £135,000.

0:49:190:49:22

And for the three-bedroom detached, between £140,000 and £145,000.

0:49:220:49:27

Based on the higher figures,

0:49:270:49:29

Gurmit could sell these houses for a total of 415,000,

0:49:290:49:33

giving him a pre-tax profit of around 115,000.

0:49:330:49:38

Bit down. Don't think much of that, but I reckon they should be

0:49:380:49:42

a bit more to 175, 180.

0:49:420:49:47

Gurmit's not impressed with those sales valuations.

0:49:470:49:50

But what about rental values?

0:49:500:49:53

For a three-bedroom semi,

0:49:530:49:54

I would estimate a rental of between £600 and £650 per calendar month.

0:49:540:49:59

And for a three-bedroom detached,

0:49:590:50:01

between £650 and £700 per calendar month.

0:50:010:50:04

For the two three-bedroom semis at the back,

0:50:040:50:06

you're looking around 650 to 700 per calendar month.

0:50:060:50:08

And for the three-bedroom detached at the front,

0:50:080:50:10

you're looking 700 to 750 per calendar month.

0:50:100:50:13

The top figure would give a combined rental of £2,150 per calendar month,

0:50:130:50:17

which equates to a return on a £300,000 investment of 8.6%.

0:50:170:50:23

That's about right. We're quite happy with that.

0:50:230:50:26

Gurmit plans to add these houses to his rental portfolio once

0:50:260:50:30

they're completed. So after five years - and counting -

0:50:300:50:34

does Gurmit have any advice for the viewer watching?

0:50:340:50:37

I'd tell them to get out of bed and get on with it!

0:50:370:50:42

We return now to the bustling town of Newcastle-under-Lyme,

0:50:470:50:52

where earlier I took a look at this three-bed end terrace house

0:50:520:50:55

guided at 85 grand.

0:50:550:50:56

With Keele University a short distance up the road,

0:50:580:51:02

I thought the best option for this property seemed obvious -

0:51:020:51:05

convert it into student accommodation.

0:51:050:51:07

Why not think about creating another bedroom downstairs?

0:51:070:51:11

Get some students in here,

0:51:110:51:12

and hopefully you can maximise your money.

0:51:120:51:15

It was Nancy who successfully bid 94 and a half grand at auction,

0:51:160:51:20

and initially, she had big plans for this place.

0:51:200:51:24

Originally, what I wanted to do was buy this, do it up,

0:51:240:51:27

-extend it out the back.

-Yes.

-Make it big, open-plan.

0:51:270:51:30

-Yes.

-Even possibly go up into the loft and do a four-bedroom.

0:51:300:51:34

However, some sobering advice from local estate agents soon

0:51:340:51:39

-changed her mind.

-And they both said the best that

0:51:390:51:41

you're going to be able to get out of it is 110.

0:51:410:51:44

And I thought that that's just not...

0:51:440:51:46

-Yeah.

-..I'm going to be at a loss at that point.

0:51:460:51:48

So Nancy put her backup plan into operation,

0:51:500:51:53

which was to convert the house into student accommodation.

0:51:530:51:56

Living in France, the family only had

0:51:580:52:01

a two-month window before the kids

0:52:010:52:03

had to go back to school,

0:52:030:52:04

so it was straight to work and spending that 20 grand budget.

0:52:040:52:09

We've come back ten weeks later to see how they got on.

0:52:090:52:12

It looks like this has been a pretty successful conversion.

0:52:230:52:26

The main task for the builder was to change the lounge into a bedroom.

0:52:280:52:32

This has been achieved by blocking off the existing door

0:52:340:52:36

to the kitchen and adding a corridor for separate access.

0:52:360:52:41

It's a bit of an experiment,

0:52:410:52:42

because usually, student lets will have a communal area

0:52:420:52:46

and then the kitchen. But because we had a large enough kitchen,

0:52:460:52:49

I figured that could be the communal space.

0:52:490:52:52

And in my experience, a lot of teenagers live in their room anyway,

0:52:520:52:56

at least at my house they do! They never venture into the lounge.

0:52:560:52:59

So I thought it might be better to have a nice-sized bedroom

0:52:590:53:03

instead of a separate lounge,

0:53:030:53:06

and then let the kitchen be that communal space.

0:53:060:53:09

Again, it's got the television and a nice size table and chairs.

0:53:090:53:13

The main bedroom upstairs is a work in progress,

0:53:150:53:17

but the other two are ready to let.

0:53:170:53:20

The bathroom has been completely upgraded,

0:53:200:53:23

with a bath that's big enough

0:53:230:53:25

to accommodate those unexpected last-minute guests.

0:53:250:53:27

You know what students are like.

0:53:270:53:30

Apart from some painting, the project is almost complete,

0:53:320:53:36

and they've managed this all within their ten-week timescale.

0:53:360:53:40

But what gave them the biggest headache?

0:53:400:53:43

My husband, oh, had the gruelling job

0:53:430:53:45

of stripping down the skirting boards.

0:53:450:53:48

There was like, I don't know,

0:53:480:53:50

maybe a centimetre thick of paint that could stand up on its own.

0:53:500:53:54

So he was going through every single room, stripping down the skirting.

0:53:540:53:57

But after that, after the first month,

0:53:570:53:59

we were really clearing a lot out.

0:53:590:54:01

There was a lot of furniture and bits and bobs here.

0:54:010:54:04

That was pretty much it.

0:54:040:54:05

A lot of it was just finding the tradesmen to do the job.

0:54:050:54:09

That's what took the longest time.

0:54:090:54:11

In the back garden, everything's been cut back and tidied,

0:54:130:54:17

and there's even a lockable shed for items too big to be stored inside.

0:54:170:54:22

All that's required now is some barbecue weather.

0:54:220:54:24

Nancy has kept to her ten-week timescale,

0:54:250:54:28

but what about the budget?

0:54:280:54:29

I'd say we're on budget, 20,000.

0:54:310:54:33

I haven't tallied up,

0:54:330:54:34

because we're still in the midst of the renovation,

0:54:340:54:38

but I'd say about 20,000 sounds right.

0:54:380:54:41

Ideally, we should be asking a couple of students round

0:54:410:54:44

to see what they think of this place.

0:54:440:54:46

But, of course, they'll be lying in bed under a duvet,

0:54:460:54:48

watching a certain property show, obviously.

0:54:480:54:50

Only kidding! We know you're working.

0:54:500:54:53

Instead, we've invited two local property experts

0:54:560:54:59

along to cast their eye over Nancy's refurbishment.

0:54:590:55:02

Erm, it's a really, really lovely job that's been done to it.

0:55:040:55:08

It's obviously been prepared for student let.

0:55:080:55:12

And they're going to be lucky students.

0:55:120:55:14

It's been done very, very well indeed.

0:55:140:55:17

I'm very impressed. It's nice to see somebody go to such an effort

0:55:170:55:21

when developing a property.

0:55:210:55:23

It's geared up for letting out to students.

0:55:230:55:27

And there's a lot of space.

0:55:270:55:29

Talking of space, do the agents think

0:55:310:55:33

that Nancy's open-plan living and kitchen area fits the bill?

0:55:330:55:37

I think the kitchen is adequate,

0:55:370:55:39

because I do feel that the bedrooms are big enough for the students

0:55:390:55:42

to study in, and to a degree, to socialise in.

0:55:420:55:45

The kitchen is the only living space.

0:55:450:55:47

It is a little on the small side.

0:55:470:55:50

We're going to have four students in here.

0:55:500:55:52

Inevitably, that probably means a lot more bodies than that

0:55:520:55:55

at certain times. It's going to be tight.

0:55:550:55:58

Nancy held back on extending this property as a family home.

0:55:590:56:03

This is because of the advice she got from the estate agents

0:56:030:56:06

about the maximum sales price achievable.

0:56:060:56:09

Is that advice borne out in the figures?

0:56:090:56:11

The value for this property would be in the region of 110,000.

0:56:110:56:16

I would recommend a marketing figure in the region

0:56:160:56:20

of £115,000 to £120,000.

0:56:200:56:23

That's what we were expecting,

0:56:230:56:25

and that is why we didn't do a lot of the renovations

0:56:250:56:28

that originally we were going to do with extensions,

0:56:280:56:31

because of the area.

0:56:310:56:32

So, yeah, that's fine, and we don't intend to sell anyway.

0:56:320:56:36

Nancy has invested 114 and a half grand in this project.

0:56:370:56:41

And even that top figure would leave her

0:56:410:56:43

with just a five and a half grand pre-tax profit.

0:56:430:56:47

So was changing her plan to student rental the right decision?

0:56:470:56:51

How much rent could she expect to achieve?

0:56:510:56:53

If we were to let the property in the student market,

0:56:540:56:57

I would anticipate a weekly figure of around £80,

0:56:570:57:02

which would equate to approximately £1,300 per calendar month.

0:57:020:57:09

You are looking, per room, at this standard,

0:57:090:57:13

it's going to be somewhere between £80 and £90 per room.

0:57:130:57:16

So you're probably looking at, overall,

0:57:160:57:18

somewhere in the region of 1,200 to £1,300 per month.

0:57:180:57:22

That's bang-on, that's just what were expecting, exactly.

0:57:220:57:25

£1,300 per month is the equivalent of a yield of just over 13.5%.

0:57:250:57:31

But that would assume full occupancy over the whole year,

0:57:310:57:34

which won't be the case if it's student tenants.

0:57:340:57:38

This house is almost ready to start earning some income for Nancy,

0:57:380:57:41

so what does she feel she's learned from this project?

0:57:410:57:45

You have to be careful with your ceiling price.

0:57:450:57:47

We got caught out on this one, but again, thankfully, you know,

0:57:470:57:50

we have an alternate route.

0:57:500:57:51

But if somebody does not want to get into rentals,

0:57:510:57:53

that could have been a real big problem.

0:57:530:57:56

So just be mindful of those max values when you're going to auction.

0:57:560:58:00

You know, it's always great to see the end result

0:58:030:58:05

of a top property renovation. It's really, really satisfying.

0:58:050:58:09

I know, but you can never take things for granted, Lucy.

0:58:090:58:13

So many things that could go wrong,

0:58:130:58:14

and that's what makes it so exciting!

0:58:140:58:16

Yes, join us next time for more highlights

0:58:160:58:18

and low lights here on Homes Under The Hammer.

0:58:180:58:20

-Goodbye.

-Goodbye.

-Goodbye.

0:58:200:58:22

A grand Edwardian home falls under the hammer in Eltham in London, friends decide what to do with a piece of land in Handsworth near Birmingham, and a property developer weighs up a number of options with her auction buy in Newcastle-under-Lyme. Martin, Lucy and Dion meet the new owners and hear their plans.